The possible role of endogenous retroviruses in the maintenance of homeostasis is a controversial subject. The mouse genome contains a profusion of complete and partial integrated proviruses and it is clear that there are mouse strain dependent quantitative and qualitative differences in the expression of these endogenous viruses. Our laboratory is involved in the identification and characterization of endogenous viruses and products therefrom. Our previous identification of an endogenous gp70 expressed during erythroid differentiation in normal mice has provided a framework for further study. We are currently examining in more detail the structural heterogeneity of endogenous viruses expressed in hematopoietic organs. The isolution and characterization of these viruses are in progress and the possible role of these viruses in protection from exogenous infection is being examined. These studies have focused on the possible role of endogenous viruses in interfering with early events in exogenous virus infection (i.e., binding and penetration). A model has been developed to study these mechanisms using cell fusion as a phenotypic marker of the fusion between viral envelope and cell membrane. This fusion event is a critical step in the process of virus penetration. Cell fusion was found to be pH dependent and independent of an intact viral genome. Using a group of recombinant viruses, this function was mapped to the 5' half of the gp70 gene, a region distinct from that previously considered, based on sequence data, to be responsible for the fusion event [p15(E)]. Further studies should provide information on the site(s) of penetration of murine retroviruses and the relative importance of virus binding and penetration in viral interference.